Threat to 1,400 Land Rover jobs

HUNDREDS of car workers face redundancy after Land Rover threatened to suspend production of its Discovery model in a row with one of its key supplier's receivers. The company is in dispute with auditor KPMG, which acts for the insolvent UPF-Thompson - the sole supplier of the 4x4's chassis.

KPMG has demanded payments of £45m from Land Rover but the car maker insists this is in breach of existing contracts with the supplier and will not pay. Its offer of a £4m goodwill payment has been rejected.

Suspending production of the 4x4 Discovery would result in 1,400 staff being laid off and could affect more than 10,000 jobs among its other suppliers.

Land Rover chairman Bob Dover said there was a good chance that production would be suspended 'unless we can find a sensible way out of this dilemma'.

The company might look overseas for a supplier but Dover said the chassis was 'a huge component and can take several months to do'. A court injunction obtained last week ensures delivery of the chassis until at least January 25.

Land Rover, a subsidiary of US motor giant Ford, is working to reverse annual losses of £172m.

UPF has supplied Land Rover since the 1950s and sells 70,000 chassis a year to the car maker, which is based in Solihull, West Midlands. It was forced into receivership last month with debts of more than £50m - double its annual sales figure.

KPMG corporate recovery partner Mark Orton said: 'We are also trying to protect the future of UPF and the people who work there.'